BlackBerry maker Research In Motion (RIM) today won a reprieve on the threat of a blackout on its 500,000 smartphone users in the United Arab Emirates (UAE), just days before security agencies were due to enforce a ban on email, messaging and web browsing on the devices.

After months of standoff between the Gulf and Canada, the UAE telecommunications regulator said on Friday that RIM had brought its devices into line with strict local jurisdictions on security and encryption. Although the details of the compromise are unknown, RIM is thought to have granted some access to communications passed between devices to the UAE government, though there is no confirmation of this from either side.

RIM has publicly maintained a defiant position, insisting that there would be no changes in the security measures given to its Enterprise customers, who are usually private companies and public bodies requiring a greater level of encryption on communication than individual customers.

The Telecommunications Regulatory Authority on Friday said: "All Blackberry services in the UAE will continue to operate as normal and no suspension of service will occur".

RIM said: "RIM cannot discuss the details of confidential regulatory matters that occur in specific countries, but RIM confirms that it continues to approach lawful access matters internationally within the framework of core principles that were publicly communicated by RIM on 12 August."

The UAE's biggest mobile operator and carrier for approximately 80% of BlackBerry customers in the country, Etisalat, on Friday said it would cancel planned "mobility packages" previously offered for BlackBerry users – which would move them to non-RIM devices in the event of an enforced shutdown – in the expectation of an agreement with the UAE telecoms regulator. Etisalat confirmed that it will be launching two new BlackBerry devices in the country in the coming days, an indication that a long-term solution between the handset maker and the government has been made.

A university professor in UAE, who wishes to remain anonymous, told the Guardian: "The general opinion amongst the business expat community, westerners at least, has been for some time now that [the ban] wasn't going to happen. Call it a failure of imagination on their part, but no one could conceive of how the country could do something so counterproductive to the image they are trying to present primarily to the west.

"Was it posturing? To some extent. The tradition of haggling here is an art form, the performance-value a joy in itself. That attitude certainly informed the government position vis-a-vis RIM – gamesmanship, brinksmanship, it's what people do here. And, frankly, those making the decisions had little to lose, personally."

The announcement of an agreement between the two may have been postponed "to score a financial windfall", our source said, adding that the UAE release of Apple's iPhone4 10 days ago had seen "staggering sales".

"All those Emiratis who sold their BlackBerrys in June will now go and buy new BlackBerrys only for messaging," he said. "I have many students who carry around a Nokia or iPhone for calls and a BlackBerry for messaging alone. Etisalat and the government have made a massive amount of money out of this, whatever the political intention of the proposed ban."

The UAE development is in stark contrast to negotiations over authority access to BlackBerry communications in India, where the government has also opened up a front against internet companies – including Google and Skype – and mobile operators. As in the UAE, India is seeking to bring communications companies inside local jurisdictions, uncomfortable at western companies hosting servers holding data outside the country.

Last week India rejected security compromises made by Canada-based RIM, saying it still could not access communications sent via corporate emails and the BlackBerry Messenger service. An internal memo leaked to India's Economic Times newspaper showed that RIM has told the telecommunications agency that it cannot technically hand authorities a key which would decode encrypted messages.

The threat of a blackout for the 800,000 BlackBerry customers in India still looms large, while the two parties continue to work for a solution that satisfies government security fears while not compromising the privacy of RIM's customers.